Aspects of import substitution in the mining and processing industry

Abstract

There are at least two aspects to the import substitution policy in mining and processing and related industries. One is related to the forced restriction of international competition, the growing share of imperfect competition, costs in the form of lower overall product quality, higher prices, and potentially higher corruption. The other implies wider possibilities for domestic equipment and technology designers and suppliers, ensuring independence and stability in the basic sectors of the economy. The possible import substitution mechanisms include:— direct import substitution with products designed and manufactured domestically;— joint manufacture with high localization (70–80 %);— parallel import through alternative suppliers;— reorientation to alternative suppliers.According to expert assessments, rapid import substitution is deemed impossible only for a few critical groups of equipment, including high-power electric motors, ore mills of the largest standard sizes, and high-pressure grinding rolls. The supply of these machines for new or reconstructed processing plants seems highly problematic. As regards the above-mentioned mills, this type of equipment has a very long life cycle and mainly requires the supply of replacement parts. In general, Russian manufacturers are able to reliably cover the demand for all basic mineral processing equipment, with the exception of three or four types of custom high-performance solutions. In the field of laboratory equipment for mineral raw materials, domestic enterprises supply all types of equipment required by the industry.The study was carried out under the grant issued by the Russian Science Foundation (project No. 20-79-10125).